New regulations regarding business establishment in the Enterprise Law 2020 in Vietnam

The Enterprise Law 2020 takes effect from January 1, 2021. Bellow are new regulations regarding business establishment in Vietnam in the Enterprise Law 2020

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More entities are prohibited from establishing businesses

The law stipulates three additional entities prohibited from establishing or managing an enterprise, including:

– Police;

– People with difficulty in cognition and behavior mastery;

– The organizations are prohibited from doing business and operating in a number of fields according to the Criminal Code.

Abolish regulations on notification of enterprise seal samples

Article 43, the Enterprise Law 2020 in Vietnam has removed the regulations on notification of enterprise seal samples before use. The use, management and retention of the seal comply with the company’s charter.

Enterprise is responsible for changing ] information of the business

From January 1, 2021, when there is a change in accordance with the law, instead of the legal representative of the enterprise, the enterprise itself is responsible for:

– Registration of changing contents of the Certificate of Business registration.

– Notice of changes in business registration content.

– Register to change the content of the Certificate of registration of branch operation, representative office of the enterprise.

If an enterprise establishes a business location, the name of the business place must include the name of the enterprise together with the phrase “Business Location”.

(The Enterprise Law 2014 did not mention this issue).

Regulations on the valuation of assets contributed as capital when the enterprise is established

Basically, the Enterprise Law 2020 retains this provision, with only one new point:

“In the case of the valuation organization, the value of the assets contributed as capital must be approved by more than 50% of the members or founding shareholders;”

According to the old law: must be approved by a majority of members, founding shareholders.

 new Regulations Regarding Business Establishment In The Enterprise Law 2020 In Vietnam
New Regulations Regarding Business Establishment In The Enterprise Law 2020 In Vietnam

Some contents in the company charter

The Law on Enterprises 2020 details and requires more specific information about a number of contents such as:

– Full name, contact address, nationality

+ of general partners, for partnerships;

+ of the company owner, a member, for a limited liability company;

+ of founding shareholders, for joint stock companies.

Capital contribution and value of contributed capital of each member, for limited liability companies and partnerships.

Number of shares, types of shares, par value of each type of shares of the founding shareholders, for a joint-stock company;

– Number, managerial position and rights and obligations of the legal representative of the enterprise; division of rights and obligations of the legal representative in case the company has more than one legal representative; …

Time limit for capital contribution to establish a multiple-member limited liability company

Regarding the deadline for contribution, it is still 90 days from the date of issuance of the Business Registration Certificate.

However, after 90 days if a member has not contributed or fully contributed capital, within 30 days from the last day of having to fully contribute the contributed capital amount as prescribed, the company must register to change the charter capital and percentage capital contribution.

Under the Enterprise Law 2014 is to change within 60 days.

Private enterprises are allowed to transform directly into joint stock companies

– A transformed enterprise must satisfy the following conditions:

+ The business lines registered for business are not prohibited;

+ The name of the business is set according to regulations;

+ Having valid business registration documents;

+ Pay the enterprise registration fee in full in accordance with the law on fees and charges.

– The owner of the private enterprise commits in writing to take personal responsibility with all his assets for all unpaid debts and undertakes to fully pay the debt when due;

– The owner of the private enterprise has a written agreement with the parties to the unliquidated contract that the converted company receives and continues to perform such contracts;

– The owner of the private enterprise commits in writing or has a written agreement with other capital contributors on the receipt and use of existing employees of the private enterprise.

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